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Investors Are Still Buying Houses

Could it be that investors are snapping up bargains? There are early signs that’s the case, writes Brenda Ward.

11 October 2021

Even though Kiwis couldn’t enter houses for sale for weeks over the lockdown, investors are still buying properties.

And that could be because they’re snapping up bargains, suggests CoreLogic’s senior property economist Kelvin Davidson.

He says data shows deals have still been done, and investors have stayed as key market players.

“So far in quarter two, cash investors who are multiple property owners have had a relatively steady market share, with mortgaged investors also holding their ground at about 25 per cent of purchases.

“In other words, investors have retained their presence in the market in recent months, even though the number of deals has been lower.”

The data shows these investment trends across most of New Zealand, he says.

The smaller players, those with two, three or four properties, have kept a solid presence in the market in recent months, he says.

“One factor behind the interest in property from these ‘Mum and Dad’ investors is likely to have been the low returns on other assets, such as term deposits.”

He expects investors’ presence could hold up in the coming months, picking that some will be searching for ‘bargains’ in a subdued market.

Meanwhile, there’s been a small rise in market share for Kiwis moving from one house to another.

The first-home buyer market share, however, is 23 per cent.

“While still solid, it is their lowest in about two years. First-home buyer’s market share had actually already started to edge lower prior to lockdown, so there may be some signs here of emerging affordability pressures for would-be buyers.”

In Dunedin in particular, figures show that first-home buyers could well be starting to struggle with the previous rapid gains in prices.

“There are obviously many drivers behind first-home buyer activity, but one factor in their favour has at least been the recovery in KiwiSaver balances, hence potential house deposits.”

JUNO’s content comes from sources that JUNO magazine considers accurate, but we do not guarantee its accuracy. Charts in JUNO are visually indicative, not exact. The content of JUNO is intended as general information only, and you use it at your own risk.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.

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